Page 24 - UKRRptAug20

Ukraine’s economy fell 10% y/y in the second quarter​, according to the consensus forecast of Reuter’s monthly poll of analysts. This would be the biggest drop since the 14.5% drop recorded in the second quarter of 2015, the economic aftermath of Russia’s annexation of Crimea and the outbreak of war in the industrial east. For this year, the economists forecast gdp will shrink 5.5% y/y in the third quarter and 3% in the fourth quarter.
3.2 ​Macro outlook
Ukraine's economy will be shown to have fallen 10% in the second quarter year-on-year due to restrictions to tame the coronavirus outbreak, ​and it will not be able to recover fully in the next six months, according to a Reuters monthly poll of analysts. It would mark the deepest decline since the economic aftermath of Russia's annexation of Crimea and the outbreak of military conflict in the industrial east, which led to a 14.5% year-on-year fall in the second quarter of 2015.
In the first quarter, the economy declined by 1.3% compared to 2.9% growth in the first quarter last year​. Analysts forecast Ukraine's gross domestic product to shrink 5.5% year-on-year in the third quarter and 3.0% in the fourth quarter. The twelve analysts polled by Reuters see the economy shrinking 6.5% for the full year compared to growth of 3.2% in 2019. The government expects a -4.8% drop in 2020.
As a sequel to the government printing money to stimulate spending and investment, inflation will triple​, rising to 7.3% in December 2021, from 2.4% last month. The hryvnia will devalue 5% from current levels, averaging 29.1 hryvnia to the dollar in 2021. Through 2023, imports will increase by 22%, to $86bn, and Ukraine’s trade deficit will increase by 63%, to $17bn, according to the forecast approved yesterday by the Cabinet of Ministers.
A robust performance in the farming sector, which has started the grain harvest, may offset some of the damage ​to the economy from the coronavirus pandemic, but consumer demand and investor activity will remain weak in 2020, analysts said.
24​ UKRAINE Country Report​ August 2020 ​ ​www.intellinews.com